The Special Investigation Team (SIT) investigating the Andhra Pradesh liquor scam has made shocking allegations in a remand note that could have far-reaching political and financial implications. According to the remand note, the alleged ‘kingpin’ of the ₹3,200 crore scam, K Rajasekhar Reddy, known as Raj Kasireddy, has accused top leaders of the ruling YSR Congress Party (YSRCP) of receiving kickbacks from liquor brands in exchange for preferential treatment in government-run outlets.
The remand note, filed by the SIT after Kasireddy’s arrest, claims that the liquor racket began in 2019 and involved the collection of ₹50-60 crore in monthly kickbacks from liquor brands. These funds, according to the SIT, were laundered through hawala operators in cities like Hyderabad, Mumbai, and Delhi.
The scam allegedly involved manipulating the automated ordering system for liquor procurement. The system, initially designed to ensure transparency in the procurement process, was reportedly tampered with, allowing new brands—many of which were affiliated with YSRCP leaders—to be granted orders far exceeding prescribed caps. The remand note further claims that high-level brands were removed from sale, and new, lesser-known brands received preferential treatment, resulting in illegal kickbacks.
According to the remand note, kickbacks were collected from liquor distributors at varying rates: ₹150 per case for cheaper brands, ₹200 per case for mid-range brands, and ₹600 per case for high-end brands. These funds were allegedly handed over to Kasireddy, who then distributed the money to prominent YSRCP leaders, including V Vijay Sai Reddy and Mithun Reddy. The remand note suggests that the total amount collected in kickbacks during the period from 2019 to 2024 was an astounding ₹3,200 crore.
Alleged Schemes and Shell Companies
The investigation also reveals that a complex web of shell companies was set up to facilitate the laundering of these illicit funds. Funds were transferred to gold and bullion accounts, as well as real estate companies, using hawala networks to conceal the money trail.
The SIT’s investigation alleges that this widespread corruption was a direct violation of procurement policies. The previously transparent system of automated liquor orders, in place from 2014 to 2019, was replaced after 2019 with a manual process, giving the YSRCP-affiliated officials greater control over procurement orders. The new system allegedly allowed for orders far beyond the prescribed caps—10,000 cases for a new brand—leading to preferential treatment for certain brands linked to YSRCP leaders.
The preferential treatment resulted in a steep decline in market share for well-known brands like United Spirits, Kals Breweries, and Pernod Ricard, which saw their market share plummet from 53.12 percent in 2018-19 to just 5.25 percent in 2023-24.
The YSRCP’s Denial
The ruling YSRCP party has vigorously denied the allegations, calling the liquor scam charges a politically motivated attempt to malign party leaders. The party criticized the TDP-led NDA government for orchestrating a baseless narrative against YSRCP, claiming that the charges were fabricated and that the opposition was using media propaganda to target the ruling party.
In response to the arrest of Kasireddy, the YSRCP accused the SIT of coercing statements and failing to produce any solid documentary or financial evidence to back up the claims of a ₹3,200 crore scam. They also alleged that low-level employees and private individuals had been harassed in the course of the investigation.
The SIT has yet to present any conclusive evidence linking the YSRCP leadership directly to the scam. However, the investigation continues, and officials are combing through a trail of financial records, testimonies, and communications to build a stronger case.
Political Fallout and Ongoing Investigation
The allegations against top YSRCP leaders come at a time of heightened political sensitivity in Andhra Pradesh, with elections on the horizon. As the investigation into the liquor scam unfolds, it is likely to spark further political debate, with both sides accusing each other of fabricating charges for political gain.
The investigation is expected to continue for weeks as authorities gather more evidence to determine the full extent of the corruption and money laundering involved in the Andhra Pradesh liquor scam. The outcome of the probe will have significant implications for both the ruling party and the opposition.
Key Points:
- K Rajasekhar Reddy, the alleged kingpin, accuses YSRCP leaders of collecting ₹50-60 crore in monthly kickbacks.
- Kickbacks were allegedly laundered through hawala networks and shell companies.
- YSRCP leaders, including V Vijay Sai Reddy and Mithun Reddy, allegedly received money from liquor brands for preferential treatment.
- The scam allegedly involved manipulating liquor procurement orders, phasing out well-known brands, and promoting new YSRCP-linked brands.
- The YSRCP has denied the allegations, calling them politically motivated.
This story is still developing, and more details may emerge as the investigation progresses.
Sources By Agencies
